LIC IPO: Life Insurance Corporation (LIC) Wednesday announced a price band of Rs 902-949 per share for its Rs 21,000 crore initial public offering that will run from May 4 to May 10.
It announced a discount of Rs 60 for policyholders and Rs 45 for retail investors and employees.
The anchor book opens on May 2 but the issue will open for retail investors two days later as May 3 is a holiday for Eid. Investors can bid for a minimum of 15 shares and thereafter in multiples of 15 shares.
The government had cut the issue size from Rs 65,000 crore as the Russian invasion of Ukraine roiled markets — but this will still be India’s largest IPO. The floor price is 90.2 times the face value of the share and the cap price is 94.9 times the face value of the share, LIC said.
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The government will sell 22.13 crore shares or its 3.5 per cent stake in LIC through the share offering.
Ahead of the public offer, the Securities and Exchange Board of India (Sebi) increased the size of bids that retail investors can submit using Unified Payment Interface. Sebi cleared the LIC IPO on March 9.
The government was earlier keen on launching the LIC IPO in March 2022 to meet its revised disinvestment target for the current fiscal.
The issue size was cut amid Russia’s invasion of Ukraine as US Federal and foreign investors started pulling out funds in the wake of the US Federal Reserve’s rate hike plans.
At a press conference in Mumbai, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the IPO was sized correctly.
“This (LIC IPO) is right sized, considering the capital market environment and will not crowd out capital supply given the current market environment,” Pandey said.
Even after the reduced size of about Rs 20,557 crore, the LIC IPO is going to be the biggest initial public offering ever in the country, he said
In March this year, market experts had urged the government to price the public issue at attractive valuations for it to sail through in the current market conditions. With better pricing and 10 million policyholders opening demat accounts to get an additional discount on the IPO price, the issue is expected to sail through, analysts said.
LIC had filed its draft papers for the IPO on February 13. The government has time till May 12 to launch the IPO without filing fresh papers with regulator Sebi. Once the IPO is over, listing of LIC shares on the stock exchanges is expected to happen in April itself.